The document provides an overview of a startup fundraising workshop. It discusses why startups raise capital, how startup funding works through different rounds, and the fundraising process which includes creating a strategy, documentation, investor outreach, and due diligence. Key parts of the process are researching investor criteria, negotiating terms, and addressing potential red flags for investors such as inconsistent financial models or founders not thinking big enough. The presentation aims to provide best practices for startups to successfully raise funds.

1. Startup Fundraising
Workshop
Herman Kienhuis
World Summit AI
October 12, 2022

2. Agenda
Introduction
Why raise capital
How startup funding works
The fundraising process
Fundraising strategy
Fundraising documentation
Researching investors
Reach out
Investor criteria
Key terms
Red flags & Best practices
Q&A

3. Introduction
Founder and managing partner of Curiosity VC
(4 seed investments)
Founder of angel syndicate River Venture Partners
(18 seed investments, 4 exits)
MD of KPN Ventures
(17 scale-up investments, 4 exits)
MD of SanomaVentures
(21 seed investments, 5 exits)
MT SanomaDigital - digital product/business
development
(10+ digital product launches)
McKinsey & Company
MBA (INSEAD), MSc Chemical Engineering
Married, father of 3, supporting equality,
sustainability, entrepreneurship, slow journalism,
education

4. Introduction (cont’d)
New VC fund, founded in 2021
Team of 4, based in Amsterdam
€50 mln target fund size
Early-stage investments
AI-driven b2b software companies
Benelux, Nordics & Baltics
Invested in Deeploy, AlphaAR,
Freesi, Strise

5. Why raise capital?
• Fixed costs of starting-up
• R&D investments
• Financing early-stage losses
• Working capital investments
• Creating cash liquidity buffer
• Production/inventory investments
• Customer acquisition investments
• International expansion
• Accelerating growth
• Fighting competition

6. How startup funding works
...more
rounds…
FFF
stage
€50k-250k
Friends
& Family
€140k
28% of
€500k
Angel/
Seed round
€250k-€2m
Angel
investor
€500k
22% of
€2.3m
Series A
round
€2m-€10m
VC
investor
Employee
option pool
€2.5m
13% of
€20m
Series B
round
€10m-20m
2nd
VC
investor
€5m
10% of
€50m
IPO
€50m+
Public
investors
€50m
9% of
€575m
Idea-stage
You
0
100%
of 0
Your
stake’s
value
Co-founder
stage
<€50k
Co-founder
Co-founder
€50k
33% of
€150k

7. The fundraising process
1. Create
fundraising
strategy
2. Create
fundraising
documen-
tation
3. Create
investor
longlist
4. Reach
out
5. Pitches
8. Select
lead & co-
investor(s)
9. Due
Diligence
10.
Transaction
documen-
tation
6. Deep-
dives
7. Solicit
&
negotiate
term
sheet(s)
preparation
selling
closing

8. Create Fundraising strategy
How much do we need to raise?
Which sources of funding can we tap into?
What investors and value add do we need?
When do we want to run the process?
Who will lead & support the process?
What are our minimum terms?
What are our alternatives?

9. supplier credit
bank loans
strategic (corporate)
investors
venture capital
angel investors
Sources of funding
capital
need
(€
mln)
100
50
10
5
1
0.5
0.1
high risk low risk
stock exchange
(public equity)
private equity
start
development phase
friends & family
Pre-seed
(preparation)
Seed
(mvp)
Early-stage
(start-up)
Later-stage
(consolidation)
Growth-stage
(scale-up)
Maturity
token
sales
innovation
loans
crowdfunding
subsidies
revenue
based
financing
venture
debt

10. Examples of public funding options
Netherlands (RVO)
● R&D tax credits (WBSO)
● Early-stage financing (Vroege Fase Financiering / VFF)
● Government guaranteed loan (MKB-Borgstellingskrediet)
● Innovation loan (Innovatiekrediet)
● SME innovation grants (MIT)
EU (Eureka)
● Eurostars
● ITEA4
● Globalstars
● Specific ‘calls’ aimed at AI

11. Create fundraising documentation
Appendices:
● Financial model
● Captable
● Founders/management profiles
● Tech architecture and roadmap
● Detailed sales pipeline
● Customer metrics &
testimonials
● Go-to-market approach and
roll-out plan
● Org chart and hiring plan
Dataroom for DD
Investor Pitchdeck (max 20 pages)
● Purpose/mission
● Problem
● Solution
● Positioning & USPs
● Business model
● Traction (results)
● Team
● Market Potential
● Go-to-market
● Financial Forecast
● Timing (why now?)
● The funding ask (& use of proceeds)

12. Create investor longlist
Research investors that:
● invest in similar companies
● in the right stage
● in the right industry & segment
● in the right geography
● with the right investment horizon
(fund lifecycle)
● focus on relevant SDG’s or impact
goals
● bring required value add
● are people you want to work with
Sources:
● Crunchbase
● Dealroom.co
● Pitchbook
● Matchmaking platforms
(e.g. StartupFountain)
● Support organizations
(e.g. Techleap)
● Founders
● Investors
Longlist should probably be longer
than 20, but shorter than 50

13. 4. reach out to investors
Reach out 6 months before zero-date
● Preferably through personal intro
● Send teaser deck with ask
(feedback, intro’s, opportunity to pitch, funding)
● Propose 30 min. video call to kick-off conversation
● Simple reminder mail/call after 2 weeks
Ideally, start building relationships earlier
● Get connected
● Ask for feedback on scope/criteria/required milestones
● Send regular investor updates to keep them informed

14. 5/6. Investor criteria
Product
● Solving a real problem
● Sustainable competitive
advantage
● Attractive business
model
● Flywheel, network
effects, feedback loops
Potential
● Addressable market
size & growth
● Market attractiveness
● International
scalability
● Exit potential
● Impact
Plan
● Complete (tech,
commercial, hiring)
● Realistic (bottom-up,
assumptions based on
data)
● Consistent
Team
● Ambition, dedication and
stamina
● Complementary
expertise/background
● Track-record; ability to
execute
● Learning mindset
Traction
● User/Customer reviews
● Customer metrics
● Sales metrics
● Unit economics
(CLV/CAC)
● Month-on-month
growth
Terms
● Fair valuation
● Economic rights
(preferences / downside
protection)
● Information rights
● Control rights
● Captable & governance

15. 5/6. Investor criteria - AI specific
Product
● Proprietary data
● Proprietary algorithms
● Problem/solution focus
● Future proof architecture
● Accuracy
● Compliance, explainability
● Uniqueness
● Defendability
Potential
● Access to training data
● Scalability of AI
solution
● International
scalability
● Data generation and
reinforcement
potential
Plan
● AI/ML roadmap
● R&D investments
● Training data
investments
Team
● AI/ML expertise
● Access to data science
talent
● Ecosystem network
(NLAIC, AI-hubs,
universities, R&D, big tech)
● AI ethics
Traction
● Customer references
on value add of AI
Terms
● IP warranties
● #responsibleAI

16. Exit Potential: VC Math
Investments
(total fund size)
Required proceeds for fund
(3x in 8 year = ca. 15% IRR)
Options to get there:
● 20 investments
● €2.5m per
investment
● For avg. 20%
shareholding
(€12.5m
post-money
valuation)
● Avg.
shareholding
diluted to 15%
by new rounds
● Total required
exits valuation:
€1B
20 exits (100% success)
at €50m (x4)
10 exits (50% success)
at €100m (x8)
5 exits (25% success)
at €200m (x16 )
2 exits (10% success)
at €500m (x40)
1 exit (5% success)
at €1B (x80)
€50m
€150m

17. 7. Terms: Key items
● Valuation
● Share class
● Liquidation preference
● Anti-dilution
● Pre-emption rights, drag/tag-along
● Exit clause
● Information rights
● Voting rights on reserved matters
● Board seats
● Founder lock-up, vesting, leaver arrangements
● Representations & Warranties
● Exclusivity
● Expenses
● Conditions precedent
● #ESG, #fundright, #responsibleAI

18. 9. Due Diligence
Prepare dataroom for (confirmatory) audits on:
● Legal
● HR
● Commercial
● Tech
● Financial
● ESG

19. ● Founders not thinking big enough
● Founders not dedicated
● Not enough skin in the game, too much founder
dilution
● Founders not open to feedback
● Tech solution looking for a problem
● ‘We have no competition’
● Bad unit economics
● Not sharing all information
● Inconsistent financial model
● Too much money raised too early
● Messed up captable
● Non-standard terms
Red flags for investors

20. Fundraising best practices
● Find personal intro’s to investors through your network or via other investors or
entrepreneurs
● Research investors: point out why the approached investor is a good match
● Build up relationships with investors early; e.g. send regular updates, meet-up at events,
also when you’re not fundraising
● Use a CRM/sales tool for your fundraising process to keep track of contacts & progress
● Get at the table: use simple decks and quick demo’s to get at the table and make the
personal connection; in the end investors invest in you
● Maintain data room: set-up a dataroom right from the start of your company, and keep it
up-to-date, always ready to be opened (in parts) for interested investors
● Prepare terms: Prepare a VC-type term sheet yourself to reduce workload for investors
(and gain some control over the terms ☺), see also templates at capitalwaters.nl
● Create urgency: use planning and FOMO to create external urgency for investors
● Do Investor Due Diligence: ask investors for founder references, also of failed cases
● Stack funding: combine different sources of money, for validation, less dilution, more
value add: angels + crowdfunding + VC’s + grants + innovation loan + venture debt

21. Q&A

22. Contact
Visiting address:
TNW West
Koningin Wilhelminaplein 1
1062 HG Amsterdam
curiosityvc.com
hello@curiosityvc.com
herman@curiosityvc.com
© 2022 Curiosity Venture Capital B.V.
Curiosity Venture Capital B.V. and Curiosity Early Stage Fund Coöperatief U.A. are registered with the
Dutch Financial Authority (AFM) as Alternative Investment Fund Manager (AIFM) and Alternative
Investment Fund (fund ID: 50026848)